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Wylie v Botha NO and Others (2189/05, ECJ80) [2006] ZAECHC 56 (31 October 2006)

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FORM A

FILING SHEET FOR EASTERN CAPE JUDGMENT

ECJ NO: 80

PARTIES:


  • Registrar CASE NO: 2189/05

  • Magistrate:

  • Supreme Court of Appeal/Constitutional Court: SECLD OF THE HIGH COURT


DATE HEARD: 03 August 2006

DATE DELIVERED: 31 October 2006


JUDGE(S): DAMBUZA J


LEGAL REPRESENTATIVES -

Appearances:

  • for the State/Plaintiff(s)/Applicant(s)/Appellant(s): Adv Scott

  • for the accused/defendant(s)/respondent(s) 1st, 2nd, 3rd, 5th, 6th, and 7th :Adv Rood


Instructing attorneys:

  • Plaintiff(s)/Applicant(s)/Appellant(s): Dean S Murray Attorneys

  • Respondent(s)/Defendant(s): Kim Warren, Rambu & Associates

c/o Friedman Scheckter


CASE INFORMATION -

  • Nature of proceedings : DECLARATORY ORDER

  • Topic:














IN THE HIGH COURT OF SOUTH AFRICA

(SOUTH EASTERN CAPE LOCAL DIVISION)                                                

                 CASE NO: 2189/05


In the matter between:                                                      NOT REPORTABLE


PETER BRUCE WYLIE                                                                      APPLICANT


and


JOHANNES PETRUS DANIEL BOTHA NO      FIRST RESPONDENT

NEVILLE RODRICK WYLIE NO                         SECOND RESPONDENT

RUST TRUST COASTAL DEVELOPMENT CC THIRD RESPONDENT

SYLVIA WYLIE                                                    FOURTH RESPONDENT

NEVILLE RODRICK WYLIE                                FIFTH RESPONDENT

VANESSA MERLE SUTHERLAND                     SIXTH RESPONDENT

LEE-ANNE SHARP                                              SEVENTH RESPONDENT

MASTER OF THE HIGH COURT                         EIGHTH RESPONDENT

REGISTRAR OF CLOSE CORPORATIONS       NINTH RESPONDENT

______________________________________________________________


JUDGMENT

______________________________________________________________


DAMBUZA J:


1.         In this application the applicant seeks an order:


1.1       declaring that he is entitled to have the members’ interest in the third respondent (the corporation) transferred and registered in his name against payment by him to the estate of the late John Graham Wylie (the deceased) of an amount of R983 482.74; and


1.2       That the First and Final Liquidation and Distribution Account (the L&D Account) in the estate of the deceased be redrawn so as to reflect the position set out in 1.1 above.


2.         The applicant also applies for condonation of his late filing of this application.


3.         The application is opposed and the respondents have raised two points in limine.  The first point in limine is that the applicant was fully aware, prior to launching the application, that there are “wide ranging and irresoluble” disputes of fact on material issues as the applicant’s claim to the member’s interest in the corporation had been rejected by his co-executors to the deceased estate some nine months prior to the L&D Account lying for inspection.


4.         The second point in limine is based on the applicant’s failure to lodge his objection to the L&D Account within the stipulated period of 21 days (in terms of Section 35 (7) of the Administration of Estates Act, 1965 – “the Estates Act”).  The respondents contend that the applicant’s objection to the L&D Account was correctly rejected by the Master as it had been lodged outside the 21 day period.


5.         The background to this application is that the applicant together with the fifth, sixth and seventh respondents (“Neville, Vanessa and Le-Anne respectively”) are children of the deceased who died on 15 May 2003.  During his lifetime the deceased had conducted a business of a general dealer store together with his wife (the fourth respondent or Sylvia) at Engcobo in the Transkei.  In about 1981 they moved to East London.  In 1985 they moved to Port Elizabeth as the deceased wanted to assist the applicant and another son of the deceased who predeceased him, in their food distribution business.  In about 1993 the applicant left the food distribution business and went to Plettenberg Bay.  In 1996 he started a business of a sea-food retailer which he was still conducting at the time of the hearing of the application.  He conducts the business from a building owned by the corporation.  The deceased was the sole member of the corporation, having bought the members’ interest thereto in 2001.


6.         According to the applicant the members’ interest to the corporation is, in fact, owned by him, his father having lent him the money to buy the interest.  As security for the loan that the deceased advanced to the applicant, the members’ interest was registered in the name of the deceased.  The arrangement was that once the applicant had repaid the loan, the members’ interest would be transferred to him.


7.         It is common cause that the purchase price of the members’ interest was R975 000.00.  The deceased made a cash payment of R500 000.00 towards the purchase price and a bond was registered over the property for an amount of R250 000.00. 


8.         According to the applicant he sold a house in which he had resided in Plettenberg Bay for approximately R500 000.00 and went to live in one of the flats on the property owned by the corporation.  He used R209 485.40 of the proceeds of the house to make a payment towards the balance of the purchase price of the members’ interest (which would have been R225 000.00).  He also paid a further R13 599.52 towards the balance of the purchase price for the members’ interest.   He then paid interest of R7 100.00 per month to the deceased on the monies advanced by the deceased to him and also paid the bond instalments.


9.         In 2003 the deceased repaid the balance of the (R250 000.00) loan to the First National Bank (FNB).  After the balance of the bond had been paid the applicant paid interest to the deceased on the increased amount of his indebtedness to his father in instalments of R10 000.00 per month.  After the deceased died the R10 000.00 instalments were paid to the deceased’s wife (applicant’s mother) with whom the applicant stayed at the time of the hearing.

10.       According to the applicant since the death of the deceased he has collected and kept rental of approximately R17 600.00 from the tenants who lease premises on the property owned by the corporation.  The period over which this amount was collected is not stated.  He has also effected some renovations to the property and has generally taken responsibility thereof as any owner would.


11.       The respondents dispute the applicant’s claim to the members’ interest in the corporation.  Neville (who is cited in his capacity as a co-executor in the deceased estate and as a beneficiary in terms of the will of deceased), maintains that the deceased bought the interest to the corporation for his own benefit.  Hence the interest is registered in the name of the deceased.  He contends further that the applicant’s claim to the members’ interest is based on false allegations and deliberate misinterpretation of events that led to exchange of monies between the deceased and the applicant.  According to Neville:


11.1    In October 1997 the deceased lent an amount of R220 000.00 to the applicant and the applicant signed an acknowledgement of debt in respect of the loan. The acknowledgement of debt dated 20 October 1997 is attached to the respondents’ answering papers. The acknowledgment of debt is in keeping with the deceased’s nature and practice of always ensuring that all his financial transactions were recorded in writing.


11.2    It is therefore unlikely that the deceased would not have recorded that he had advanced a loan to the applicant for the purchase of the members’ interest.  Further, the deceased would not have recorded or endorsed in the financial statements of the corporation and other relevant documents that the members’ interest in the corporation was his and that the money he received from the applicant was rentals from the tenants occupying the property were that not the case.  Copies of two handwritten documents (AA 14 and AA 15) annexed to the answering papers reveal certain amounts recorded as “rent rec” (presumably rent received) and “investments.”  Both documents bear the heading “Plettenberg Bay.”    The parties are agreed that the handwriting thereon is that of the deceased.


11.3    During early 2000 the deceased told him (Neville) that the building in which the applicant occupied a shop was being sold and that he (the deceased) intended to acquire the members’ interest in the corporation that owned the property rather than buying the property itself.  The deceased would pay the purchase price of R975 000.00 by means of a cash payment of R500.00, a loan from the First National Bank Limited (FNB) and the balance would be funded out of the loan repayment by the applicant (in respect of the loan of R220 000.00). 


The applicant would “look after” the property for him in return for which the applicant would occupy one of the flats in the building free of rent.


11.4    Indeed the applicant sold his house in Plettenberg Bay and the R209 485.40 that he paid to the deceased was the repayment of the balance of the loan of R220 000.00 and not part payment of the purchase price as the applicant alleged.  The R13 599.52 was also part repayment of the loan of R220 000.00.


12.       On 7 April 2004 the applicant deposed to an affidavit in support of a claim that he allegedly has against the deceased estate.  The claim is for R35 161.45.  The affidavit (annexure “AA8” to the answering papers) reads as follows:


“I, the undersigned, PETER BRUCE WYLIE, hereby declare under oath that during August 2000, I advanced a loan to my late father, JOHN GRAHAM WYLIE, to enable him to acquire the entire members’ interest in RUSTRUST COASTAL INVESTMENTS CC.  At the date of his death, 15 May 2003, an amount of R35 161.45 (thirty five thousand one hundred and sixty one rand and forty five cents) was still outstanding on the loan and due to myself.”


13.       Neville contends, correctly, that the contents of this affidavit differ materially to the allegations that the applicant now makes regarding the members’ interest in that:


13.1    There is no indication on the affidavit that the deceased was to buy the members’ interest for or as the applicant’s nominee;


            13.2    The loan was advanced by the applicant to the deceased.


14.       In reply the applicant states that the affidavit was prepared by the first respondent (Botha), a co-executor in the deceased estate employed with Trevor Wait Chartered Accountants, who dealt with the deceased’s financial affairs prior to his death.  According to the applicant Botha told him (applicant) to sign the affidavit “in order to have the estate wound up.”  The amount of R35 161.45 however remains unpaid despite all liabilities of the deceased’s estate having been paid.  This, according to the applicant, supports his case in that it was generally accepted that the R35 161.45 is not due to him.


15.       The value of the property owned by the corporation appears in the L&D Account as R2 315 875.00.


16.       The L&D Account was prepared by Neville as co-executor of the deceased estate.  It was advertised and lay for inspection at the office of the Magistrate, Port Elizabeth for 21 days from 6 August 2004 to 27 August 2004.  According to the applicant, he instructed his attorney, Mr Wessels from Plettenberg Bay, to object to the account.  A letter of objection dated 16 September 2004 was sent by the applicant’s attorneys to the Master of the High Court in Grahamstown.  During December 2004 Mr Wessels was handed a letter dated 3 December 2004 at the office of the Master of the High Court in Port Elizabeth in which the Master rejected the applicant’s objection on the basis that it was lodged out of time. 


17.       According to the applicant when Mr Wessels learnt of the rejection of the applicant’s objection it was about the middle of December 2004 and his Port Elizabeth correspondent and counsel were about to go on their end of the year vacation.  After counsel was instructed, (presumably on his return from leave) there was a further delay as he (counsel) needed further information and documentation to be obtained.  Hence the late filing of the application.  (The application was launched on 31 May 2005, the respondents’ answering papers were filed on 2 November 2005 and the replying papers were filed on 25 July 2006).


18.       According to Neville, the members’ interest has already been transferred to the testamentary trust established in terms of the deceased’s will.  However, the document he refers to in support of this allegation (AA13), being the corporation’s amended founding statement, states that Albert Ruskin’s estate and Phillip David Berman cease to be members of the corporation and that the deceased owns the 100% interest thereto.   


CONDONATION:


19.       Under Rule 27 (1) of the Rules of this Court, in the absence of an agreement between the parties the Court may, upon application on notice and on good cause shown, make an order extending any time prescribed by the rules or by an order of court or fixed by an order extending or abridging any time for doing any act.  See:  Erasmus: Superior Court Practice at B-170.


20.       The court, may, under Section 35 (10) of the Estates Act, allow such further period as it deems appropriate for an aggrieved person to apply to court for an order setting aside the Master’s decision in respect of an objection lodged.  See also: Macdonald, Forman & Co Ltd v Van Aswegen en ‘n Ander 1963 (3) SA 173 (O).


21.       The application was brought about five months subsequent to the applicant becoming aware that his objection to the L&D Account had been overruled.  The explanation given by the applicant is that counsel needed some evidence and also had to consult with the applicant’s mother (fourth respondent).  The applicant’s mother has filed an affidavit in support of the application.  She confirms the applicant’s version regarding the applicant’s alleged acquisition of the members’ interest.


22.       It has been submitted on behalf of the applicant that the respondents will not suffer prejudice as a result of the late filing of the application and/or any prejudice they might suffer is outweighed by the prejudice that the applicant will suffer if condonation is not granted. 


            The respondents contend that there is no reasonable prospect of this application succeeding; therefore the applicant will not suffer any prejudice in the event of the condonation being refused. 


23.       It is not enough for an applicant in an application for condonation to allege that the delay on his/her part is not likely to result in prejudice to the opponent.  Where good cause is not shown the question of prejudice does not arise.  See:  Standard General Insurance v Eversafe (Pty) Ltd & Others 2000 (3) SA 87. 


24.       I am of the view that the applicant could have instructed his attorney within a relatively shorter period than he did.  He had always been aware that his brother and co-executors were opposed to the transfer of the members’ interest to him and that in the draft and the First and Final L&D Accounts the members’ interest appeared as an asset in the deceased estate, a situation which his co-executors insisted would prevail despite his objection.  The evidence supporting his claim to the members’ interest (as set out above) is largely oral and was already within his knowledge by 6 August 2004 when the L&D Account first lay for inspection.   However, because of the value of the members’ interest in dispute, I am persuaded not to dismiss the application for this reason only but to also consider the applicant’s prospects of success in the main application. 


FIRST POINT IN LIMINE:


25.       The applicant raised the issue of the members’ interest belonging to him as far back as November 2003 or soon thereafter, when the draft L&D Account was faxed to him.  After the applicant raised the issue, Botha informed the applicant that after working through all the relevant documents in his possession, which he had received from the deceased prior to his death, he had found nothing to support the applicant’s claim and the members’ interest would therefore be dealt with as an asset of the deceased estate. 

 

26.       It is apparent from the papers and from the submissions made by counsel in their Heads of Argument and during argument that the parties accept that there are disputes of fact in this matter. 


27.       Rule 6 (5) (g) of the Rules of this Court provides that:


            “where an application cannot properly be decided on affidavit the court may dismiss the application or make such order as to it seems meet with a view to ensuring a just and expeditious decision.  In particular, but without affecting the generality of the aforegoing, it may direct that oral evidence be heard on specified issues with a view to resolving any dispute of fact and to that end may order any deponent to appear personally or grant leave for him or any other person to be subpoenaed to appear and be examined and cross-examined as a witness or it may refer the matter to trial with appropriate directions as to pleadings or definition of issues, or otherwise.”

28.       The applicant seeks relief of a final nature.  Therefore the test set out in the Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd [1984] ZASCA 51; 1984 (3) SA 623 A at 634 E-G applies.  The relief sought can be granted only if the facts stated by the applicants together with the admitted facts in the respondents’ affidavits justify it.  In this case I agree that the relief sought by the applicant is not justifiable on the facts set out by the respondents.  


29.       The applicant contends that he did not realise, when he launched the application, that there would be disputes of fact.  He sheds no light, however, as to what informed his impression in this regard.   


30.       Apart from the rejection of the applicant’s claim to the members’ interest by his co-executors after the completion of the draft L&D Account in 2003, the following is further evidence of their (the executors) attitude towards his claim to the members’ interest.


30.1    In a letter to Botha dated 16 September 2004 Mr Wessels states that the applicant had advised Botha of his claim to the members’ interest on a number of occasions.  By advertising the First and Final L&D Accounts in which the members’ interest was shown as an asset of the deceased estate, Neville and Botha registered their persistent disagreement with the applicant’s allegations.


30.2    Botha in a letter to the applicant dated 21 October 2004 calls upon the applicant to furnish him with the lease agreements in respect of the property and to account for rentals collected by him from the tenants of the property and to deposit them into a Standard Bank account which was being opened in the name of the corporation.  The letter also states that Neville had expressed concern that certain rental income had not been declared (presumably by the applicant).  This is further evidence of Neville and Botha’s opposition to the allegation by the applicant that he owned the members’ interest. 


31.       I am therefore satisfied that the disputes of fact in this application have always been reasonably foreseeable.  The next question is whether the applicant’s institution of proceedings by way of application despite foreseeable disputes of fact justifies dismissal of the application or whether I should refer the matter for oral evidence or to trial.  The parties have indicated that in the event that the application is not dismissed they would prefer that it be referred to trial.


32.       The applicant contends that Section 35 (10) of the Estates Act stipulates that the Master’s decision may (only) be challenged by way of motion proceedings.  Section 35 (10) states that: a person aggrieved by a direction by the Master may apply by notice of motion to the court for an order to set aside the Master’s decision.  Hence the applicant’s institution of motion proceedings. 


33.       Indeed a party who is obliged by law to bring proceedings by way of notice of motion cannot be penalized on the basis that he should have anticipated the conflicts and proceeded in another way in the event of a conflict of fact arising on the papers which can only be resolved by oral evidence.  See:  Erasmus; at B1-49; See also:  Chief Motlegi v President of Bophutatswana 1999 (2) SA 480 at 488 D.   


34.       In Davids v Estate Hall 1956 (1) SA 774 (C) the court held that a creditor who had lodged an objection to an L&D Account and whose objection had been overruled was not precluded from instituting action in a court for the recovery of the amount of his claim merely because he failed to move the court to set aside the Master’s ruling.  In my view this applies equally to a creditor or any other person whose objection has been overruled by the Master regardless of the basis on which the objection is overruled.  The applicant could therefore have instituted an action.

35.       However, it does not necessarily follow that because a dispute of fact is reasonably foreseeable an application will always be dismissed with costs.  There may be circumstances present which will persuade a court to order the parties to go to trial.  See:  Erasmus (supra) at B-150, See also:  Pithey v Quirck 1923 WLD 41, See also:  Van Aswegen v Drotskie 1964 (2) SA 391 (O) at 395 C-D.


36.       In Room Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd 1949 (3) SA 1155 it was held that if the disputes of fact were reasonably foreseeable it may be appropriate to dismiss an application with costs. This, however is not an immutable rule.  See:  Chapmans Peak Hotel v South Peninsula Municipality 1998 (4) ALL SA 619 at 642 d.  A court may, in certain circumstances, deem it appropriate to order the parties to oral evidence or trial.  In my view the members’ interest which is the subject of the dispute in this case, is of considerable value.  The value of the property owned by the corporation was R2 315 875.00 when the L&D Account was drawn (2003).   It has been correctly contended that such value may have increased by now.  The property is a commercial building situated in one of the most popular coastal towns in South Africa.  Therefore the applicant indeed stands to suffer considerable prejudice if the application is dismissed purely on the ground of the foreseeability of disputes of fact.  Further, the close relationship between the parties, in my view, calls for the issues raised in this matter to be fully ventilated to finality.


37.       If I were to dismiss the application and trial proceedings were to be instituted, the evidence that appears in the affidavits would have to be repeated.  That would, in my view, result in a waste of time and costs.  The evidence contained in the affidavits is complex particularly insofar as it involves computation of the amounts which, in my view, can best be clarified in a trial. 




SECOND POINT IN LIMINE:


38.       It is trite that the objection must be made to the Master and must be before him before the expiry of the period during which the account is lying for inspection.  The court has no power to grant an extension for the lodging of an objection.  See:  Meyerowitz on Administration of Estates and Estate Duty; 2001 Edition at 16-18


39.       However, it appears that a person who is in the position of the applicant can still institute an action as discussed above.  In Benade v Boede Alexander 1967 (1) SA 648 the court held that it was not the intention of the Legislature to deprive a creditor who had failed to follow the procedure prescribed by the Administration of Estates Act of his right to share the assets dealt with in the L&D Account.  


40.       Having considered all relevant factors I am persuaded that the matter cannot be decided on the papers before me.  Ordinarily, I would refer the matter for oral evidence in view of the volume of evidence already contained in the affidavits.  However counsel for both parties indicated to me during argument that in the event that I do not dismiss the application, the parties would prefer that the matter be referred to trial. 


Consequently, the following order will issue:


(a)       The late filing of the application is condoned.

(b)       The matter is hereby referred to trial on a date to be determined by the Registrar.

(c)        The notice of motion shall constitute the simple summons and the applicant shall file a declaration within the time limits as prescribed by the rules of court, with the dies to commence running on the date of this order.

(d)       Any further pleadings shall be filed within the time periods prescribed by the rules of court.


(e)       The rules of court shall apply in respect of the further conduct of the matter.

(f)         The costs of this application shall be reserved for decision by the trial court.



_________________________

N DAMBUZA

JUDGE OF THE HIGH COURT                26 October 2006